Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[StealthP3D]

I think you misunderstood my post. I've been accumulating non-Tesla shares for a long time, from before I started accumulating Tesla in 2013. What happens is one day is not "utterly meaningless." It is simply what happens on a single day. The curious thing was that that particular day was illustrative of how my portfolio is not perfectly correlated with Tesla. There are days when most of my stock move in the same direction as Tesla and days when they do not. On a longer timescale this is very helpful. At times when Tesla has done poorly, these other stocks provide liquidity to accumulate Tesla on the cheap. It is especially helpful if these stock are not highly correlated with Tesla because they can hold more value when Tesla is down.

Let's make this a little more concrete. Suppose you own a portfolio of exactly 1000 Tesla shares at $600/sh and nothing. Now suppose the share price pulls back to $400/sh. What do you do? Many of us would hold on tight and wait for the price to return to $600. Great. This happens because Tesla is an awesome stock and will keep growing well pass this. You've still go 1000 shares of Tesla.

Ok, now suppose you've got 1000 shares of Tesla (starting at $600/sh) plus $200k of other liquid assets. Your portfolio is $800k and 75% of it is Tesla. You decide you like this ratio and try to stay close to it. Now again Tesla pulls back to $400. The value of your portfolio is $600k. Now you have the opportunity to liquidate $50k of your non-Tesla assets and accumulate 125 more shares of Tesla. When the price of Tesla recovers you've got 1125 shares worth $675k plus $150k of the other stuff along with appreciation (which we'll ignore. So conservatively when Tesla is back at $600, your portfolio is at $825k. You could hang on to the 1125 shares, but you would in weaker position to accumulate the next time Tesla has a pullback. Or you could rebalance to 75% which would level you with 1031.25 Tesla shares (more if your other assets are growing).

So rebalancing is a strategy for growing your Tesla position over time both in shares and dollar value. If you are confident that Tesla will keep growing in the long run, then it makes sense to rebalance whenever the share price retreats. You're confident in recovery and wish to have an even larger number of shares in the future.

The thing that I used to get hung up on is that I wouldn't rebalance when Tesla shares recovered value. Basically my only means of refreshing non-Tesla assets was to earn money at my job. When my income was high relative to my portfolio, this worked fine. I'd just save up more cash, and accumulate a few share here and there. What has changed this year is that the value of my portfolio has exploded, thanks to Tesla, SolarEdge and other stocks. The size of my portfolio now dwarfs my annual salary. My income is insufficient to rebalance my portfolio. So I have come to terms with needing to harvest gains on my high flying stocks so as to be able to seize on buying opportunities as the happen. It turns out that being able to accumulate a few more Tesla shares under $400 over the past two months was a really good thing. At this point I must harvest gains to fund such opportunistic buying.

As I pointed out, I am now in a good position to enjoy whatever happens next for Tesla. If the price goes down, I can seize on the opportunity under the belief in the long-term promise of the stock. Or if it is goes up, I can make good use of that opportunity too and have other stock positions I'd like to build up. I don't have to predict what any share price will do next. Rather I'm prepared to respond to whatever opportunities come next.

So if you have a diversified portfolio, the stocks making up that portfolio don't all move in unison? And that was the point you were trying to convey by posting the one day gains/losses of your non-TSLA stocks vs. TSLA?

OK then, and I'll refrain from calling your post condescending.

Carry on!

 

[StealthP3D]

You're traveling an awful long distance to win semantical and mostly pointless arguments this week. Yes, theoretically two Vanguard funds could set up some kind of arrangement to transfer funds at an other-than-market price. But there's almost zero chance they do and nearly zero chance they will, so who cares? One fund will almost certainly sell as an entity distinct from the other who will then buy or will have already bought. The OP was correct enough.

I'm not trying to win any arguments - I'm correcting misunderstandings as I see them posted. And not even all of them at that!

The significance of this is that ever since inclusion was announced, some people have been saying how big this would be. Once the price cruised up to $650 I realized it may or may not go from there. But people had calculated how many shares needed to be acquired (both mandatory and discretionary fund purchases) and theorized how difficult (or even impossible) it would be to supply that many shares without causing a squeeze to the stratosphere. I'm merely pointing out that there are many different mechanisms to supply shares to the funds that don't involve bidding the price to the moon. And the big players involved are not like deer caught in the headlights - they are going to act in their best interests. I simply don't buy the perspective that a dramatic squeeze is a given or even the most likely outcome and I've been saying that for at least a couple of weeks now. A large spike may or may not happen, even now. I don't think the odds of one happening have changed much although, if one happens, it looks like it would be of shorter duration and intensity than many were predicting a week ago.

I don't think it's pointless to point that out - I think it adds much needed balance. The tone of your message makes me think you have positioned yourself to lose a lot of money if we don't get a large spike in the share price. If so, and it doesn't happen, that's not my fault.

 

[mongo]

Good guess! A little north of $400B traded from 5:15 pm, Nov 16th - to end of day on Dec 8th (a little more than the entire Mkt Cap of TSLA at the Close on Nov 16: ($387B)

View attachment 618387

That's about 5x what Index Funds need to buy in TSLA stock. Or put another way, only about 1 in 5 buyers from the past month need to become sellers for the S&P Index funds to get all the shares they need.

I think the liquidity is there, the remaining question is what SP convinces the first 20% of them to sell? See what I mean? Is it similar to the 'early adopter's curve'?

Viewed another way, about $400B was spent on TSLA during the period when the Mkt Cap increased by about $234B. So, can we say approx. 58% of TSLA purchases have been held?

Again IMO, this is a sufficient liquidity reservoir to support the Addition w/o an exponential spike in the SP (as some have called an 'infinity squeeze). I do think the SP will rise, but in a controlled manner as it entices in more and more sellers. That's kinda the purpose of 'price discovery' in the Market.

Cheers!

Sum(Daily volume * closing price) from Sept 17 to Dec 8 is $425B, but that is meaningless.
Ask yourself, if Tesla were flat (or down for the day), how much flowed into TSLA positions?

Sum(Todays close - Previous close) * share price is $13.7B. Also meaningless, but shows the daily change vs the total market cap movement.
Sum(abs((Todays close - Previous close) * share price)) of $18.2B is meaningless too.

VWAP is also meaningless in terms of net position change because the trades are not matched.

One would need to know the basis of each trade to know the overall net change in investment in TSLA. The seller could have bought at any previous price.

 

[MC3OZ]

There is another battery post on Silicon Anode here:- 4680 Cathode & Anode discussion for investors

This provides some idea of the advantages Tesla could tap with a pure Silicon Anode.

 

[Lbkmxp100d]

Good guess! A little north of $400B traded from 5:15 pm, Nov 16th - to end of day on Dec 8th (a little more than the entire Mkt Cap of TSLA at the Close on Nov 16: ($387B)

View attachment 618387

That's about 5x what Index Funds need to buy in TSLA stock. Or put another way, only about 1 in 5 buyers from the past month need to become sellers for the S&P Index funds to get all the shares they need.

I think the liquidity is there, the remaining question is what SP convinces the first 20% of them to sell? See what I mean? Is it similar to the 'early adopter's curve'?

Viewed another way, about $400B was spent on TSLA during the period when the Mkt Cap increased by about $234B. So, can we say approx. 58% of TSLA purchases have been held?

Again IMO, this is a sufficient liquidity reservoir to support the Addition w/o an exponential spike in the SP (as some have called an 'infinity squeeze). I do think the SP will rise, but in a controlled manner as it entices in more and more sellers. That's kinda the purpose of 'price discovery' in the Market.

Cheers!

your forgetting a very important part of the equation. The largest portion of shares traded everyday in $TSLA are high-frequency trading were they turnover the same share multiple times.

 

[Electroman]

No idea why anyone thinks squawksquare on Twitter is a good follow for Tesla info. All rumor and gossip with no analysis and no track record of accurate predictions.

Here's my short list for Tesla info on Twitter, in no particular order.

• carsonight (has relatives that work at gigafactory NV)
• tesla_truth (retired TMC poster Fact Checking)
• Enn_nafnlaus (retired TMC poster Karen)
• Bill Wright (see my previous post for link)
• @ReflexFunds
• @MatchasmMatt (not sure why this guy doesn't have a bigger following. knows a LOT about the renewable energy market)
  
• @FrankPeelen (@FrankSG on this forum)

Gary Black is a controversial but, imo, good follow. If you have a good filter you know when to scroll on by his tweets or take them seriously.

@tesla_truth account suspended

 

[Rande]

Matt Smith offers his Q4 pre-delivery earnings estimate.

His material has progressed rapidly for someone who just started his YouTube channel a couple of months ago.

TSLA Q4 2020 Estimate by Matt (Pre-P&D Report)

Deliveries
Q1 2020 (A): 88,400
Q2 2020 (A): 90,891
Q3 2020 (A): 139,593
Q4 2020 (E): 189,000

Revenue
Q1 2020 (A): $5.99b
Q2 2020 (A): $6.03b
Q3 2020 (A): $8.77b
Q4 2020 (E): $11.67b

Gross Margin
Q1 2020 (A): 20.6%
Q2 2020 (A): 21.0%
Q3 2020 (A): 23.5%
Q4 2020 (E): 24.3%

Operating Income
Q1 2020 (A): $0.28b
Q2 2020 (A): $0.32b
Q3 2020 (A): $0.81b
Q4 2020 (E): $1.63b

Net Income
Q1 2020 (A): $0.02b
Q2 2020 (A): $0.10b
Q3 2020 (A): $0.33b
Q4 2020 (E): $1.10b

Non-GAAP EPS
Q1 2020 (A): $0.23
Q2 2020 (A): $0.44
Q3 2020 (A): $0.76
Q4 2020 (E): $1.27

GAAP EPS
Q1 2020 (A): $0.02
Q2 2020 (A): $0.11
Q3 2020 (A): $0.27
Q4 2020 (E): $0.98

 

[M|S|M MYP]

@tesla_truth account suspended

View attachment 618403

Who’s that? Fact checking is truth_tesla.

 

[Artful Dodger]

Can someone smarter than me - which is anyone reading this, basically - explain this in idiot terms?

Yes, Rob Maurer did a great job explaining the closing cross procedure in today's episode of Tesla Daily (10:59) - about 4 mins long.

TL;dw To participate in the closing cross, simple place a "Market on Close" order before 3:55:00 pm, or place a "Limit on Close" order before 3:58:00 pm.

Cheers!

 

[30seconds]

I am convinced that at this point Tesla could simultaneously be building a half dozen GFs around the world.

To produce cars with superior performance, at a higher volume, with more integrated technology, remotely upgradable, with cutting edge self driving and at a lower cost, by far, than any other automaker in the world, in order to increase efficiency and reduce human impact on the climate.

So, in other words, right on track with what Elon has been telling us and delivering upon.

Price Target: I’ll let you know when they stop growing 50% a year and actual legitimate competition shows up. Otherwise it would just be fiction.

That is the nutshell version of my current investment thesis.

 

[Artful Dodger]

your forgetting a very important part of the equation. The largest portion of shares traded everyday in $TSLA are high-frequency trading were they turnover the same share multiple times.

Not forgetting, and it does not matter who trades what how many times. Sitting on your hands and NOT trading is an investment decision. You CHOOSE to let the market action proceed w/o interacting.

Shares are fungible. It is the result that matter, only. And that is measured by the Mkt cap. Indeed, nothing is knowable about who is trading. Pining for that is futile, such information does not exist.

Cheers!

 

[chrsk]

With green macros I assume will close at 610$ tonight

 

[MXWing]

Excellent video and analysis that discusses Dark Pools and the Nasdaq cross.

We won't know until the last few minutes what the index funds are actually going to end up purchasing at.

 

[Criscmt]

Profit taking so far by a subset of front-runners. Has it been significant?

Here are some factors that make me wonder about the extent to which at least significant number of front-runners already took profits.

• Likely many won't aim to sell at peak, but rather take the profits when they reach a significant level.
• The price action in the last 1-2 weeks
• We perhaps saw a mini blow-off top last week.
• Tweet [1] by @truth_tesla about volumes. I am not very confident on the volume based theory. I would love to hear on this form someone more knowledgeable than me @FrankSG, @bxr140 @Right_Said_Fred @generalenthu @MABMAB @rexmakesbeats?

That said, if we assume a large subset of front-runners took profits, given that funds pretty much didn't buy any, who bought these shares from this subset of front-runners? Front-runners that are more risk tolerant, and/or with high conviction that price will go much higher, and/or BM funds?

[1] Over 668m shares traded since breaking $600 - most of the November index speculator hedge funds likely out already with ~50% profits. Historically TSLA's current breakout is the lowest volume one on a weekly volume basis: half the volume of the July and August rallies.

 

[Criscmt]

Closing cross over the last several days

@Davidzhao365 While you were gathering the closing cross information over the last several days, did you notice any pattern on closing cross?

 

[Tslynk67]

Yeah this thing is way too complicated. If there is a sell side imbalance we drop? And vice versa. That makes sense but I’m confused as to why these sellers will suddenly show up at closing hours and basically just hand them over to the index funds at the closing price.

Oh boy I hope S&P knows what they are doing. I think they probably have a fair idea as to how this is going to turn out. BTW here’s a video if you want to waste ten minutes of your life.

Edit: we need a new button dedicated to S&P inclusion: Confused.

Thanks, I found that video very useful and I'd recommend it for others struggling with the concept.

So to take part in this closing-cross auction you need to introduce "buy/sell on close" orders. I don't have such and order type with my broker (KeyTrade in Belgium, as you were asking), so I'm out.

 

[Criscmt]

The man, @elonmusk, is showing us the moon
We might see "Stock to the moon tomorrow" messages on /wsb

 

[Paul_SF]

The man, @elonmusk, is showing us the moon
We might see "Stock to the moon tomorrow" messages on /wsb

 

[CanadaEV]

Excellent video and analysis that discusses Dark Pools and the Nasdaq cross.

We won't know until the last few minutes what the index funds are actually going to end up purchasing at.

Rob did explain it all very well.

What I would like to understand better is why the frontrunners would not demand very high prices.
Rob says it is because they don't want to get left with the shares after all index funds are satisfied.
That may be the 'practical' reason, and it may actually work.
Still, it seems there will be an opportunity for some frontrunner sellers to purposely retain those shares, knowing the likelihood of residual index fund demand. After all, their goal for participating has to be profit from high prices.

 

[Criscmt]

https://twitter.com/BillWri90307793/status/1339474667808018434?s=20